Home North AmericaNorth America 2005 The exciting new world of communications

The exciting new world of communications

by david.nunes
Walter B. McCormick, Jr Issue: North America 2005
Article no.: 3
Topic: The exciting new world of communications
Author: Walter B. McCormick, Jr
Title: President and CEO
Organisation: United States Telecom Association (USTA)
PDF size: 60KB

About author

Walter B. McCormick, Jr is the President and CEO of the United States Telecom Association (USTA), a trade association representing the converged telecommunications industry of the United States of America. A respected Washington veteran with more than 20 years experience in telecommunications issues, Mr McCormick first gained experience as a trade association executive while serving at the helm of the American Trucking Associations. Before his trade association work, Mr McCormick headed the practice group on Regulatory Affairs, Public Policy and Legislation at Bryan Cave LLP. Before practicing law, he had a distinguished career in government. Mr McCormick, nominated by President George Bush, and confirmed by the US Senate, served as General Counsel of the US Department of Transportation. He also served for more than a decade on the US Senate staff as General Counsel of the US Senate Committee on Commerce Science and Transportation and Republican Chief Counsel and Staff Director of the Committee. Mr McCormick holds degrees in Journalism and Law from the University of Missouri. He has studied International Economics and Political Science at Georgetown University, and has completed the Programme for Senior Managers in Government at Harvard University’s John F. Kennedy School of Government.

Article abstract

Cable modems, DSL or satellite connections to watch movies, play video games, talk or check email were unthinkable a few years ago. In the US, laws and regulations have failed to keep pace with the changes. Policies are needed to encourage companies using different technologies to invest and compete with new services. Policymakers can choose between government central planning and the free market approach that built America by taking power from the government and returning it to the consumer.

Full Article

In today’s dynamic global economy, without question, the world of communications has fundamentally and irreversibly changed. Rapid advances in technology have transformed the communications landscape and consumers today benefit from tremendous choice and innovation. As a result, new communications technologies have brought consumers around the world closer together to create a vibrant, competitive global marketplace. With swift innovation and constantly evolving services, consumers today communicate in ways that were unthinkable just a few years ago. The distinct lines that once separated services among communication providers no longer exist. You can choose between cable modem, DSL or satellite high-speed connections to watch movies, play video games, talk or check email. The days when telephone companies simply offered voice services, cable companies only offered video services and mobile phones were primarily used by business travellers are now merely a distant memory. As long as they have access to the latest technologies at competitive prices, consumers could not care less which company provides their service. The numbers speak for themselves. Today, there are more mobile phones than home phones in the US and an increasing number of businesses are going exclusively wireless. Recent studies also show that 31 billion emails are sent every day and instant messaging is further transforming real-time communications. While email and instant messaging have already dramatically changed how we communicate, the next fault line to slip and disrupt the communications landscape will be that of IP-based services. Last year, Voice Over the Internet (VoIP) was considered a disruptive technology on the margins of the industry. Just one year later, though, VoIP is a mainstream service with leading telecom and cable companies rolling it out to millions of consumers. Already, 14 million Americans have placed a phone call over the Internet and more than 14 per cent of all phone calls is expected to be IP-based in the next four years. Perhaps most surprisingly, the number one VoIP customers today are served not by their local telecom or cable companies but instead by Microsoft. On their Xboxes, users can play video games from home and chat with other players live on their headsets. This is a growing market and there is more to come. VoIP and wireless bundled minutes have had an enormous impact on consumer expectations for voice service. Now that some companies are even offering free voice service, and wireless plans are eliminating the difference between local and long distance calls, local telecom providers understand the critical need to remain competitive in this rapidly changing environment and are acting aggressively to meet consumer expectations. While VoIP has started a revolution for communications, the increasing deployment of broadband services, will lead to more opportunities. Emerging IP video offers consumers even more options for video service and consumers have more control over their communications products so they can watch the programmeming they want when they want. Telecom service providers are working feverishly and spending billions of dollars to invest in communications networks that speed new and innovative services, like IP video, to their customers. These significant investments will allow telecom carriers to offer even more attractive and competitive voice, video and data service packages to consumers. While technology has dramatically changed how the world communicates, unfortunately, in the US the rules for the industry have failed to keep pace. To ensure a vibrant, competitive communications market, the nation needs industry rules that do far more than acknowledge that the Internet exists. We need policies that recognize the communications sector as a major force in our economy and our lives, one in which a wide variety of companies using different technologies should be encouraged to invest and compete and to speed new services, choices and value to consumers. With the right policies in place, there are tremendous opportunities ahead to create more jobs and spur economic growth in today’s information economy. However, today as the result of misguided regulations, the US–the country that invented the Internet–lags behind many other nations and merely ranks 13th in the world for broadband deployment. To speed deployment, we need policies that encourage, rather than discourage, private-sector investment. The US Chamber of Commerce estimates that if all market rivals were free to invest and compete head-to-head, the US could see 212,000 jobs and US$634 billion in GDP growth in the next five years alone all for simply allowing consumers, rather than regulators, to determine which companies and technologies meet their needs. Fortunately, leaders in the US Congress understand how much the communications world has changed and they are moving forward with plans to catch up the laws with our lives. A great debate has begun on Capitol Hill about how best to spur broadband deployment, to speed the offering of exciting new services to consumers and to secure a position of leadership for America in the new information-based world economy. This debate presents American policymakers with a fundamental choice between reliance on government central planning or upon the free market. Some may argue that telecommunications is just too important to trust to the free market and the government must carefully manage competition in telecommunications. They might insist that precise calibration is required and the right innovation, investment and services for consumers can best be determined through regulatory reviews by government bureaucrats at the city, state and federal levels. While that is one way to address the issue, there is an alternative approach. A bold and uniquely American approach would rely upon individual investors, forward-looking entrepreneurs and free enterprise to make the right choices. This approach takes power away from the government and gives it to the consumer. This nation took this approach in the 20th Century while other societies did not. America’s approach led to the greatest innovation, the greatest investment, the broadest consumer choice, the strongest economy, the greatest social progress and the highest standard of living that the world has ever known because investments flow to markets that are free. The United States Telecom Association represents a wide array of telecom carriers from the smallest rural co-op to some of the largest communications companies and employers in the country. Today, while Congress is beginning to tackle these issues, our members are all asking the same questions: What is my role in this new world? How can my company best compete on this new terrain? How can I play a constructive role for consumers and for our economy? USTA, and our growing array of allies, have united around a shared agenda that encourages the cross-platform competition we see today to advance our information economy and the nation’s global competitiveness. We support safeguards to ensure vital social objectives like emergency 911 services, universal service and other key priorities. We support policies that empower consumers by placing into their hands the ability to determine which companies, which technologies and which services succeed by their decisions in a competitive marketplace. With Congressional leaders committed to updating the nation’s telecom laws, now is a critical time to ensure American leadership in the communications sector. Setting the right policies will speed deployment of advanced services and put consumers in control of today’s vibrant communications market. A new forward-looking 21st century communications policy will help ensure that US consumers, workers and businesses reap the full benefits of this exciting new world of communications.

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